Sony’s Michael Lynton on How the Net and Social Media Are Changing the Movie Business

Michael Lynton joined Sony as its studio chairman in 2004. Eight years later — last March — he ascended to CEO of Sony Corporation of America, taking on oversight of all of the company’s U.S. entertainment businesses, except for videogames. A big job, and one that he’s performing at a time when Sony is under tight financial constraints. Among his top challenges: Adapting Sony’s movie business to Internet distribution at a time when movies like “Skyfall” are still grossing $1 billion in the theaters.

Onstage at D: Dive Into Media, one of his first appearances since accepting the new job last spring, Lynton talked about the state of the music and movie business in 2013. Are people still going to the theater to see movies and watching TV the way they used to? According to Lynton, they are. “The Internet hasn’t wiped anything out — yet,” Lynton said.

That said, the movie business is changing. Or, rather, consumer tastes are changing the movie business. “We had a good year with ‘Skyfall’ and ‘Zero Dark Thirty,'” Lynton said. “They did well, but they also taught us a lot about where the audience is these days.”

How so? According to Lynton, same-old, same-old is no longer quite as successful as it used to be. An eight-episode “Beethoven” franchise might have been a good idea a few years ago. These days, it’s not such a great thought.

“You’ve got to surprise people,” Lynton said. “The movies that are successful these days are often the movies that the audience would have never expected to see on the big screen. Think about ‘Zero Dark Thirty.’ Even franchise movies are different. Sure, ‘Skyfall’ is a James Bond movie, but it has a very different James Bond.”

“One of the engines of that change is social media and its effect on the post-moviegoing experience. Thanks to Twitter and Facebook, viewers can actually affect the way a movie performs. A film’s audience can now help kill a movie or extend its life.”

“The biggest issue for movie studios has always been that some films are good and others aren’t so good,” Lynton said. “Originally, marketing was supposed to smooth that out. But we can’t do that anymore. With social media, you can no longer hide the goods. … If you have a good movie and the right people see it, you can put that message out there and accelerate the promotion process. But those people don’t like it? That’s a very difficult message to muffle.”

What if those people like it so much that they create an audience willing to pay a premium to watch a first-run film in their homes? Will we ever be able to pay $40 to watch a “Zero Dark Thirty” in our living rooms, when others are still going to the theater to see it?

Not for a while, said Lynton. “We’ve never really talked about doing that,” he said. “What we’ve talked about is releasing stuff during the dead period that occurs between when the movie leaves the theater and finally makes its way to DVD, cable. I like that idea a lot. But there are a lot of people at all levels of the industry that are concerned about that.”

Notes from the session:

On DVDs: DVD is not going away. Not now, not for the moment.

On Netflix and the DVR: “I think Netflix and DVRs have fundamentally changed the creative nature of the product in a spectacular way. … In the past, you had a really difficult time, you had a tough time creating long-form drama. The DVR and Netflix allowed people to catch up if they missed an episode. That’s a huge deal. You can now create these long-form narratives where characters can be developed over 13 episodes. That’s more attractive to viewers and writers. And that’s a good thing.”

On Facebook and Twitter: They can help a lot. “Marketing is a complicated recipe. If you don’t have all the right ingredients, the recipe falls flat. Social media is definitely part of the recipe. We like social media. The studio system is set up to look at tracking, and tracking is set up to follow television, not social. We’re not properly measuring social media.”

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